The Supervisory Board regularly discusses FMO’s risk profile and other financial and accounting matters in all of its meetings. In-depth discussions on these matters were prepared by the Audit and Risk Committee (ARC), which met three times during the year. Members of the ARC include Supervisory Board members Koos Timmermans (Chairman), Alexandra Schaapveld and Thessa Menssen. In 2017, the ARC advised the Supervisory Board amongst others on the following topics: the transition to IFRS 9, the internal and external audit plans and the Business Plan 2018.
In terms of financial results, FMO had an exceptional year, while managed as a AAA institution. It achieved a record net profit and further strengthened its capital position. The quality of the portfolio improved significantly, while asset and liability management policies were conservative and stayed within the parameters of FMO’s risk appetite. The Supervisory Board approved the annual update of FMO’s risk appetite in its meeting of August 21, 2017.
Preparation of FMO for the introduction of IFRS 9 as per January 1, 2018 was a major project during 2017. The ARC carefully monitored progress in this transitional project. It is satisfied that FMO has implemented all material IFRS 9 requirements per the start of 2018. The Supervisory Board notes that implementation of IFRS 9 per 2018 could materially increase volatility of FMO’s reported profits going forward.
Another important effort concerns the improvement in quality of FMO’s information management. Priorities have been set in consultation with the Dutch Central Bank and the auditor. This program is ongoing and received a significant investment in capacity in 2017. It will receive continued attention from the Supervisory Board in 2018.